Daewoo Int'l CEO refuses to step down
By Lee Hyo-sik
Daewoo International CEO Jeon Byeong-eal has rejected POSCO’s call to step down, insisting that he has a mandate to complete ongoing corporate restructuring.
Jeon said he will remain in office until he successfully normalizes the operations of POSCO’s trading and natural resource development unit.
His remarks have dealt a blow to POSCO Chairman Kwon Oh-joon who has been trying to get rid of him.
According to POSCO, Daewoo International and other industry sources Thursday, Jeon sent an email to Daewoo’s outside directors a day earlier, saying that he will not quit any time soon.
In the message, the CEO said he plans to remain in charge until Daewoo completes restructuring and normalizes its operations, adding that he will only then consider leaving the company.
“It has been confirmed that the Daewoo CEO sent the message to company’s outside directors, telling them what he wants to do,” said an industry official who declined to be named. “At first, POSCO wanted Jeon to quit immediately for publically opposing its plan to dispose Daewoo’s stake in a Myanmar natural gas project. But now it wants to find a middle ground with Jeon as the controversy is getting out of hand.”
The steelmaker wanted to make it look like the CEO was voluntarily resigning, the official said, adding that the company doesn’t want the situation to become any worse than it already is.
POSCO considered selling Daewoo’s ownership in the Myanmar gas project in order to raise much-needed cash to improve its finance. But in protest, Jeon posted a message on the company bulletin board, criticizing POSCO management for pushing ahead with the sale.
He even sent an email to POSCO Chairman Kwon, arguing that unloading its stake in the Myanmar natural gas and other resources-related projects would be a huge loss for POSCO. The steelmaker holds a 60.31 percent stake in Korea's largest trading firm, which has successfully been producing natural gas in waters off Myanmar since June 2013.
POSCO management then decided to dismiss him for openly opposing its restructuring campaign targeting all affiliates. Kwon has said all POSCO subsidiaries are subject to restructuring and some of them could be sold to third parties if necessary.
Even if Jeon has vowed to remain in the office, he will likely soon be replaced, according to the industry official, who said the steelmaker will accept the resignation tendered by Jeon on May 4.
Jeon and 31 other heads of POSCO affiliates turned in resignations to Chairman Kwon to show their willingness to transform their companies into more efficiently-managed and profitable entities.
A Daewoo International official said company employees are surprised by the news that the CEO was being forced to quit.
“Jeon has been leading the company well since March 2012. Given his performance, many don’t understand why POSCO wants to dismiss Jeon,” the official said. “The CEO has remained silent about what he has done and will do. We would like to know exactly what’s going on.”
A POSCO official said nothing has been decided yet as to when and how the company will get rid of Jeon. “We are currently reviewing all the options. So it is too early to say how we will deal with the Daewoo CEO.”